BBVA in 2012

Industry trends

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In 2012, the Mexican economy maintained a strong rate of growth. Of particular interest was the domestic market strength, which has been underpinned by the progress of employment, improved competitiveness and increased capital flows. Inflation has begun to revert to 4% levels. The supply shocks prevalent in the third quarter have subsided.

In 2012, more than 700,000 jobs were created in the formal private sector, which marks the strongest average rate of growth in the last four years. The good job market performance was reflected in the positive performance of private consumption. In this way, both consumer finance and investment benefitted from financial stability and a greater flow of credit.

In the foreign sector, Mexico’s contribution to US manufacturing imports amounted to 12.6%, the highest figure in history. Despite the difficult foreign situation, Mexico has kept its fiscal and monetary policies geared towards stability, which has allowed it to rein in public deficit and keep inflation and debt low.

The year 2013 is expected to be more positive, with new opportunities arising for the approval of key reforms that, as they materialize, would represent an additional boost to the internal sources of growth.

As far as the financial sector is concerned, Mexico has continued to show a high degree of strength, with a capital ratio that is far above the minimum required (10%). As a result, it has been one of the first systems to adopt Basel III regulations.

With respect to banking activity, the loan book remains robust and has recorded 20 consecutive months of growth. All the portfolios have grown, and this dynamic mood is expected to continue due to the favorable macroeconomic environment. Customer fund gathering is also positive, so there are no liquidity tensions.

With respect to the exchange rate, the peso has appreciated over the year, both in terms of the fixing and average rates. This means its impact on the balance sheet, activity and earnings in the area has been positive year-on-year. To assist in the understanding of the business figures, the percentage rates given below refer to constant exchange rates, unless otherwise indicated.